Microsoft has loosened the hardware restrictions that PC makers must adhere to in order to install Windows XP on ultra-low-cost PCs, according to documents seen by IDG News Service.

While June 30 marked the last day for selling most new Windows XP licenses, Microsoft has made several exceptions for the older operating system, including its use on ultra-low-cost laptops such as the Asus Eee PC, as well as on an emerging class of mini desktops. These devices are sometimes called netbooks and nettops.

[ Robert X. Cringely: Is Windows XP really dead? ]

Microsoft is offering Windows XP Home Edition to encourage PC makers to use that OS instead of Linux on the low-cost machines, but it places restrictions on the hardware that can be offered.

Under the new terms, outlined in the documents, PC makers must limit screen sizes to 14.1 inches and hard-drive capacity to 160GB. ULPCs with touchscreens will also be eligible. Earlier terms set in April did not allow touchscreens at all and limited screen sizes to 10.2 inches and hard-drive capacity to 80GB. The processors are still limited to a single-core chip running at no more than 1GHz, and memory is limited to 1G byte of RAM.

ULPCs are an emerging class of products with limited system capabilities in the $250 to $500 price range. Examples include the Asus Eee PC and MSI's Wind. They are designed for basic tasks like surfing the Internet and sending e-mail, but not for more advanced tasks like video editing.

The updated terms, especially the larger screen size, mean Windows XP can be used on machines that look more like standard low-cost laptops. But ULPCs are not only defined by their size, and they remain a distinct product category due to their limited performance, said Roger Kay, founder and president of Endpoint Technologies Associates. "You can have a low-cost PC that's not small," Kay said.

The goal of the program is apparently to limit the hardware capabilities of ULPCs so that they don't eat into the market for mainstream PCs running Windows Vista, something both Microsoft and PC vendors would want to avoid.

As part of the new terms, Microsoft also added low-cost desktops to the list of products eligible for Windows XP Home, and it added Windows Vista Home Basic as a second OS option.

Microsoft declined to comment on the matter, saying it doesn't speak publicly about the details of its agreements with PC makers.

Low-cost PC vendors may be pushing Microsoft to keep Windows XP available, Kay said. Linux is another option for ULPCs, but is not yet a viable alternative, according to Kay. "I don't think Linux is going anywhere in the low-cost market," he said. "Linux doesn't really cut it when it comes to compatibility."

The documents show that for developed markets, Microsoft charges $32 to install XP Home Edition on standard netbooks, and $47 for netbooks with the larger screens. PC makers who meet certain requirements in Microsoft's Market Development Agreement can get a discount of as much as $10 on those prices, the documents show. There is a similar discount for systems sold in emerging markets, although the starting prices are lower, at $26 and $43.

The U.S. Federal Communications Commission may gather enough data through wireless testing this week in Seattle to quiet debates over the potential interference that could result from a proposed spectrum auction.

The FCC has proposed auctioning off spectrum and requiring the winner to offer free wireless broadband services in a portion of the spectrum. But the wireless industry contends that the technical rules that the FCC is proposing for the spectrum will lead to interference for 3G phone users, causing a degradation of their services.

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T-Mobile, one of the more vocal opponents of the FCC plan, has already conducted tests that it says clearly demonstrate the harmful interference. "But what we've been asking for is joint testing with the FCC," said Kathleen Hamm, vice president of federal regulatory affairs for T-Mobile.

The FCC is conducting some of the same tests T-Mobile has already done plus some additional tests, focusing on interference between handsets running on the different frequencies, said Julius Knapp, chief for the FCC's office of engineering technology.

Some of the tests that the FCC is repeating involve using handsets connected to WiMax or UMTS (Universal Mobile Telecommunications Systems) networks running on spectrum the commercial providers would use and then issuing signals using the proposed new service and spectrum. The engineers note at what signal strength the proposed service causes the WiMax or UMTS call to drop or prevents the calls from even connecting. "That's where views differ," Knapp said.

In addition, the FCC is testing how filter technologies deployed on the handsets might work to mitigate some of the interference from the proposed service, another hotly debated issue, Knapp said.

After the testing is complete, potentially at the end of the day Thursday or on Friday, the FCC will issue a report with its findings. The commission may or may not officially ask for comments on the report, Knapp said. "But we're confident people will weigh in on what it means," he said.

In addition to T-Mobile and FCC representatives, engineers from AT&T, M2Z Networks, Nokia, Metro PCS, CTIA, and XM Sirius are attending the testing, which is taking place at a Boeing facility in Seattle.

M2Z was one of the first companies to propose that the FCC distribute the debated spectrum for wireless use. The company contends that many tests into potential interference conducted around the globe have proved that operations in the spectrum wouldn't cause undue interference to nearby services. In some other countries, operators have already been allowed to offer services on the basis of those tests.

But T-Mobile, which operates a service in a similar type of situation in the Czech Republic, argues that the FCC proposal is different than the others around the world. "Given the rules that the FCC is laying out, there are significant differences from what's occurring in Europe," said Hamm.

In addition, in the Czech Republic, the comparable spectrum and the nearby bands were both auctioned off at the same time. "So everyone knew what they were signing up for," said Sara Leibman, director of federal regulatory affairs for T-Mobile.

"I know everyone gets excited about the free broadband concept," said Hamm. "T-Mobile doesn't have a problem with that but we do have a problem if it comes at the expense of our broadband deployment, particularly when we paid dearly for that."

T-Mobile, like other mobile operators, paid billions of dollars for the nearby spectrum that it is using to build a 3G network.

The FCC had originally hoped to vote on its proposal on June 12 but has delayed the vote due to objections from operators. Two lawmakers, Representatives Anna Eshoo, a California Democrat, and Edward Markey, a Massachusetts Democrat, recently urged the FCC to move forward with the plan, alleging that mobile operators are asking for unnecessary testing in hopes of delaying potential new innovative competitors from entering the market.

A Google executive Thursday heaped praise on Apple's iPhone, even with his company set to challenge Apple in this same space with its Android mobile computing platform.

During the cloud computing-focused Office 2.0 conference, Google's Matthew Glotzbach, product management director for Google Enterprise, revealed his list of 10 things that can be done in the cloud today that could not have been done a year ago. Although the list focused on Google technologies, including its newly introduced Chrome browser, the tenth spot on the list was reserved for praise of Apple's iPhone.

"I'm a huge Apple fan, I'm a huge iPhone fan. It?s really opened up computing in the mobile world," Glotzbach said, emphasizing the iPhone's impact on cloud computing. With his iPhone, he said he can perform tasks such as accessing e-mail and documents and even flip through the presentation he was set to give Thursday morning. "The mobile landscape has really been transformed by the iPhone," he said.

Google, however, has its upcoming Android mobile platform, which could become a formidable challenger to iPhone. Asked after his presentation whether he would switch to an Android unit, Glotzbach took a wait-and-see approach. "We'll have to see when it comes out. I use the best device that there is for getting what I need done," he said.

Glotzbach is not the first Google executive to tip his hat to iPhone recently. Rich Miner, Google group manager for mobile platforms, did so at the eComm conference in March but did temper his praise with some criticism.

Much of Glotzbach's presentation served as a pitch for the company's application technologies such as Chrome browser and Google Talk, which supports translation between different languages.

There are 500,000 businesses using Google Apps, which includes the company's in-the-cloud business applications, Glotzbach said. There are 3,000 businesses each day signing up for Google Apps, he said.

Touting the ability to run fast, secure, and stable Web applications as another top-10 trend, Glotzbach touted Chrome, which was unveiled earlier this week.

"Obviously, the browser today is the gateway to the cloud," Glotzbach said. Chrome presents a leap forward in terms of speed, usability and its capability for the next generation of Web applications. He also emphasized the browser's V8 JavaScript engine, saying it is much faster than what Microsoft offers in Internet Explorer.

Microsoft even could adopt V8, since it is open source, Glotzbach pointed out. "I'd love it if Microsoft took some of the innovations we [put] in the browser and built on them," he said in an interview after his presentation.

Other trends cited on Glotzbach's list included the ability to search through several years' worth of e-mail. Google's Gmail enables this capability, according to Glotzbach. Users also can e-mail from an IMAP client.

Another trend, the capability to chat with customers and partners in any language, was enabled by Google Talk and Google's translation capability, Glotzbach said.

The ability to collaborate simply and securely, cited as another trend, is being enabled by Google Docs, Glotzbach said. "It?s changed the way I collaborate. It's broken down those barriers."

Other trends cited included:

* The ability to organize business travel via e-mail, through the third-party TripIt application. * Easy collection of data from coworkers and customers via forms, also via Google Docs and Spreadsheets. * The building of scalable business applications in the cloud, such as what Salesforce.com offers via Force.com. * The ability to create templates in Google Docs. * Sharing of video inside Google Apps.

The Americas' SAP Users' Group (ASUG) is forming a new global community for customers of Business Objects, the business intelligence vendor that SAP bought earlier this year, the organization announced this week.

Membership in the Global BusinessObjects Network will be free until 2010. The organization is hoping to get existing user groups to join and serve as local chapters, while the GBN provides marketing and operational support.

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The GBN will officially launch at the Business Objects User Conference in Dallas in October. Starting on Oct. 20, users can sign up at the conference or through the Web site www.gogbn.org.

ASUG officials were not immediately available for comment Thursday.

Dave Rathbun, a member of the group's initial steering committee, said in a recent blog post that the new group is a rebranding of the Business Objects Community Alliance.

"There are various reasons for the change, some of which have to do with naming conflicts but mostly having to do with the desire to emphasize the independence from anything run by SAP," said Rathbun, who works for Integra Solutions, a Dallas consulting firm.

Rathbun expects the group to sponsor user conferences in Europe and Asia-Pacific next year, as well as one in the United States.

He added that because GBN wishes to emphasize its independence from SAP, he expects shows won't be held in conjunction with the vendor's SAPPHIRE events.

In an interview Thursday, steering committee member Jamie Oswald also emphasized the need for user groups to have independence from vendors.

Years ago, Oswald said, he couldn't get endorsement from his employer to attend local user group events because they contained too much input from Business Objects' marketing department and not enough educational content.

"The groups were run typically by people who cared a lot, but a lot of their support ... came from Business Objects," said Oswald, who now works as a senior business intelligence developer with Sisters of Mercy Health System in Chesterfield, Missouri. "That's how [Business Objects] got a lot of their content pushed in."

"I think it's gotten better over time, but now that this new independent group is in charge, it's going to shift even further into the educational side" at both local events and user conferences, he added.

This story was updated on September 4, 2008

Dell Thursday started selling a mini-notebook with Microsoft's Windows XP Home preinstalled, the first time that the world's largest computer maker has had a PC to sell with that operating system since Microsoft retired XP from general service in June.

The 2.28-pound Inspiron Mini 9 starts at $399 when equipped with XP Home, and sports an 8.9-inch display, 512MB of memory, an 8GB solid-state drive (SSD) composed of flash RAM and 802.11g wireless capability. A pricier $499 configuration boosts memory to 1GB and the SSD to 16GB.

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Dell is also selling a $349 model with 512MB of memory and a 4GB SSD that comes with Ubuntu, a popular Linux distribution, in place of Windows XP.

All Mini 9 configurations are powered by a 1.6GHz Atom processor that Intel debuted in early June.

The Inspiron Mini 9 is Dell's first system to pack Windows XP Home since June, when the Round Rock, Texas-based computer maker yanked the operating system from its lines. Microsoft had set June 30 as the retirement deadline for Windows XP -- it would stop shipping copies to large computer manufacturers and cease selling to retail -- and Dell complied by ending sales June 26.

However, in early April Microsoft announced that it would let makers of small, inexpensive laptops -- which it labeled as ULCPCs, short for "ultra-low-cost PCs," a name that never stuck -- install XP Home through June 2010, possibly longer.

At the time, Microsoft maintained that it offered the loophole not to stymie Linux, which was the only available OS for the tiny, cheap computer, but because users and hardware vendors alike had demanded XP.

"One thing we've heard loud and clear, from both our customers and our partners, is the desire for Windows on this new class of devices," said Michael Dix, general manager of Windows client product management, in a Q&A posted on Microsoft's Web site.

Dell and other big-brand computer sellers, including Hewlett-Packard and Lenovo, have continued to preinstall Windows XP Professional on business-oriented machines by taking advantage of Windows Vista's downgrade rights. According to data from PC metrics vendor Devil Mountain Software, a third of new PCs are downgraded from Vista to XP Professional, either at the factory or by users after they buy.

The Inspiron Mini 9 can be purchased from Dell's online store. Dell is also running a special beginning Friday for U.S. customers only; people who purchase a Studio 15, XPS M1530 or XPS M1330 laptop through early Tuesday, Sept. 9, can also buy a Mini 9 for $99.

Comcast, the second-largest broadband provider in the United States, has filed a court appeal of a U.S. Federal Communications Commission ruling last month saying the company couldn't delay some peer-to-peer traffic on its network.

The FCC, on Aug. 1, voted 3-2 to prohibit Comcast from slowing BitTorrent p-to-p traffic in an effort to reduce network congestion. Commissioners voting against Comcast said the traffic throttling violated FCC net neutrality principles.

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Comcast on Thursday asked the U.S. Court of Appeals for the District of Columbia Circuit to review the FCC decision, saying the commission had no hard rules against the company's network management practices. The FCC's net neutrality principles, adopted in 2005, set out general guidelines, but no specific prohibitions, Comcast said.

Comcast filed the appeal to protect its legal rights and to "challenge the basis on which the commission found that Comcast violated federal policy in the absence of pre-existing legally enforceable standards or rules," David Cohen, Comcast's executive vice president, said in a statement. "We are compelled to appeal because we strongly believe that, in this particular case, the Commission's action was legally inappropriate and its findings were not justified by the record."

However, Comcast will abide by the FCC's order during the appeal, and it will continue with plans to move toward other network management techniques by the end of the year, Cohen added. "We will follow through on our long-standing commitment to transition to protocol-agnostic network congestion management practices by the end of this year," he said. "We also remain committed to bringing our customers a superior Internet experience."

Last week, Comcast announced it would put a 250GB-per-month bandwidth cap on residential customers. Customers may get a warning if they go over the monthly cap, and after their first warning, Comcast will suspend their service for a year if they go over the cap a second time.

That cap, which goes into effect Oct. 1, received mixed reactions, with some Internet users saying a cap is preferable to blocking or slowing specific applications. Some critics complained, however, that the cap could penalize certain types of subscribers, such as those who download movies frequently. The average Comcast user uses less than 3GB per month, Comcast said.

A spokesman for Public Knowledge, among the three organizations that asked the FCC to investigate the Comcast BitTorrent traffic throttling, said he was not surprised by the appeal. "We expected that they'd appeal," said Art Brodsky.

Comcast's traffic management was unveiled by press reports in late 2007. The company didn't tell its subscribers that it was slowing BitTorrent and other p-to-P traffic until the press reports. Comcast later said it was slowing p-to-p traffic only during times of network congestion, but FCC chairman Kevin Martin and some independent tests suggested Comcast was slowing that traffic around the clock.